Regional Skills Assessment Stirling and Clackmannanshire City Region Deal Insight Report

Transcription

1 Regional Skills Assessment Stirling and Clackmannanshire City Region Deal Insight Report

2 2 Contents 1 Introduction 3 The importance of skills planning in Scotland 4 Regional Skills Assessments and Skills Planning 6 National Skills Issues 6 Content 7 2 The Stirling and Clackmannanshire City Region Deal 8 Stirling and Clackmannanshire s Economy and Place 9 Stirling and Clackmannanshire s People 20 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 29 Employment 29 Occupations 32 Sectors 38 Qualifications 44 4 Concluding Remarks 57 Appendix 1: Oxford Economic Definitions 59 Appendix 2: Key Sector Definitions 61

3 1 Introduction

4 Regional Insight Report 1 Introduction 4 The Importance of Skills Planning in Scotland Skills, alongside other wider and social and economic conditions, help to achieve the stated Scottish Government purpose of: creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth Significant public sector funding (some 2 billion) is invested annually to support skills development in Scotland. This, alongside employer and other partner investment, amounts to a substantial resource. To ensure it is invested wisely it is important to ensure that there is a robust evidence base to guide decisions. Current Scottish Government Strategy for skills includes Scotland s Economic Strategy, Scotland s Labour Market Strategy and Scotland s Youth Employment Strategy and also the recent UK Industrial Strategy. These, alongside the Scottish Skills Planning Model (Figure 1.1), influence skills investment. The skills planning model is evolving. Phase 2 of the Enterprise and Skills Review that reported earlier this year included a range of proposals to achieve the dual goals of (1) a dynamic, inclusive globally competitive economy and (2) a high performing, inclusive labour market. Work is ongoing on these proposals that include regional partnership models, learner journey models and, of most relevance to skills planning, proposals for skills alignment. Figure 1.1 Scottish Skills Planning Model The Skills Planning Model Making Skills Work for Scotland Understanding Skills Demand through: Direct employer engagement Input from our engagement with employer groups Insights through partner agencies and data research Employers: Are able to recruit the right people with the right skills at the right time. Regional and Sectoral Skills Investment Plans Investment in responsive education and training provision Matching learning provision with demand to develop the right skills Influencing choice through careers intelligence Individuals: Access a careers service that helps them pursue opportunities important to the economy and its employers. The vision for skills alignment is for skills services to be fully aligned to deliver the learning and skills necessary for sustainable and inclusive economic growth. A project is in place to achieve this; the purpose of which is to align the relevant functions of the Scottish Funding Council (SFC) and Skills Development Scotland (SDS) to ensure that Scotland s people and businesses are equipped with the right skills to succeed in the economy, not just now but in the future. The proposals include the development of a Five Step Planning Model (Figure 1.2) and a Governance Structure (Figure 1.3) Figure 1.2 Five Step Model

5 5 At the time of writing, SFC and SDS are engaged with Scottish Government to develop a detailed implementation plan to carry through the reforms identified. Work that has been agreed to take place in the short term includes: The development of Terms of Reference for a strategic Skills Hub of the Strategic Board Skills Committee; Development of the Five Step Model to confirm the deliverables of each stage; and The appointment of a Director of Skills Alignment reporting jointly to the Directors of SDS and SFC. Evidence developed through Regional Skills Assessments now and in their future evolution can help inform Step One of the Five Step Model. This iteration, unlike in previous versions, focuses much more on demand side evidence to support Step One of the proposed planning process. Figure 1.3 Governance Regional Skills Assessments and Skills Planning Regional Skills Assessments (RSAs) were first launched in 2014 and have evolved over time as a result of feedback from an independent review (2015 by the Training and Employment Research Unit) and ongoing partner consultation, as part of a continuous improvement process. Their purpose is to: Support partners in strategic skills investment planning including: The two national skills agencies SDS and SFC (in conjunction with Regional Colleges, Strategic Bodies and College Boards) Enterprise Agencies and Regional and local partnerships; and Enterprise Agencies and regional and local partnerships; and Identify gaps in evidence that require to be addressed. To ensure an inclusive approach to their development, dissemination and utilisation, RSAs are produced by SDS in partnership with Highlands and Islands Enterprise (HIE), Scottish Enterprise (SE), SFC and the Scottish Local Authorities Economic Development Group (SLAED). RSAs include the use of recently published datasets. Inevitably, when using published

6 Regional Insight Report 1 Introduction 6 data there is a time lag but the data contained is the most up to date available at the time of writing. Feedback from partners has indicated that an area of evidence they wished to see more was in relation to forecasting. Given this, RSAs also include forecast data that has been commissioned through Oxford Economics. These forecasts are based on three factors: National/regional outlooks all the forecasting models they operate are fully consistent with the broader global and national forecasts which are updated on a monthly basis; Historical trends in an area (which implicitly factor in supply side factors impinging on demand), augmented where appropriate by local knowledge and understanding of patterns of economic development; and Fundamental economic relationships which interlink the various elements of the outlook. As with all forecasts, certain caveats need to be applied. They are based on what we know now and include past and present trends projected into the future. They can therefore be affected by potential disruptors (e.g. Brexit) and unforeseen events and their value is in identifying likely directions of travel rather than predicting exact figures. The more disaggregated they become, especially at smaller geographical units, the less reliable they are likely to be. The historical data on which the forecasts are based is subject to revision and may be volatile, particularly at a sub-regional and sub-sectoral level. Therefore, forecasts at a higher, less disaggregated level are more robust than the detailed breakdowns. They also cannot take into account recent developments that may be happening at local level or an individual firm s perspective, so inevitably they lack nuance. Finally, the occupational (SOC) and sectoral (SIC) classifications should be looked at to understand how an occupation or industry is defined. Links have been given to facilitate this in the relevant sections. Education, for example, is an industrial sector that takes in a wide variety of teaching and educative functions e.g. driving instructors. It is recommended therefore that users examine trends over time rather than focusing on changes in individual years, use caution at the more granular level and examine occupational and sectoral definitions where relevant. National Skills Issues Prior to the publication of RSAs, SDS has published a national skills assessment Jobs and Skills in Scotland. This report highlights key strengths of Scotland s skills alongside challenges to be addressed, as well as pointing to drivers that will have an impact on skills and skills planning and outlining potential forecasts for the future. Nationally, it is recognised that, following the recession: Employment in Scotland has recovered and is above pre-recession levels; Many key sectors have had good employment growth despite difficult trading conditions; Scotland has maintained a highly skilled workforce; and The economy offered a range of opportunities for young people after school. That said, on demand for skills, growth rates for the Scottish economy remain behind that of the UK and, although productivity has improved, Scotland s record remains poor. Also, although employment has recovered since the recession we have seen: A rise in non standard jobs - part time employment, self employment and nonpermanent employment have grown; An hour glass labour market structure which presents challenges for progression in the workplace, underemployment and under utilisation

7 Regional Insight Report 1 Introduction 7 of skills; and Low pay and in-work poverty as of continuing concern. The report points to key areas of uncertainty for the skills environment such as the impact of Brexit, productivity challenges, societal change and automation. It also provides some indicative forecasts for the future through modelling by Oxford Economics that highlight the potential: Political uncertainty is likely to restrict the pace of economic development in the short term, and this will curtail job creation. Growth is forecast to accelerate towards the end of this decade, but Scotland is projected to underperform the UK as a whole; Total employment in Scotland is forecast to rise by 84,800 by 2027, equivalent to an average annual growth rate of 0.3 per cent. The comparable figure for the UK is 0.5 per cent; The next decade (2017 to 2027 inclusive) will see a shift in the sectoral composition of employment in Scotland. Rising employment in Business services, Wholesale & retail trade, Construction, and Health & social work will be accompanied by a reduction in Manufacturing and Public administration; These sectoral changes will affect the occupational profile of Scotland s workforce. There will be an increase in the number of Elementary clerical & service occupations and Business & public service professionals. But job losses in Manufacturing will see fewer Process, plant & machine operatives and Skilled metal & electrical trades; and Scotland s largest urban centres will lead job creation. Together, Edinburgh and Glasgow cities are forecast to account for three in every four new jobs created. Employment is forecast to fall in around a third of Scottish council areas over the next decade (2017 to 2027 inclusive). Finally, the report outlines four significant challenges and opportunities in relation to jobs and skills: 1. Boosting productivity will be vital for our long term prosperity. 2. Our growth needs to be more inclusive. 3. Scotland s demographics represent some significant challenges - and Brexit may exacerbate these. 4. The world of work is changing - we need to support businesses and individuals to navigate and embrace that change. Content It is within this national context that this RSA has been developed. The RSA for Stirling and Clackmannanshire City Region Deal is in three parts (1) a summary A3 infographic (2) an insight report and (3) a slidepack of graphs and charts for utilisation by partners. This report the insight report is in three parts: The Stirling and Clackmannanshire City Region Deal an introduction to the region s economy and its people; Demand for skills past, current and forecast demand for total employment, occupations and sectors; and Concluding remarks. Please note that more detailed implications for skills planning in the Stirling and Clackmannanshire City Region Deal can be found in the Forth Valley Regional Skills Assessment which has also been published. Further, summaries of the local authorities in the Stirling and Clackmannanshire region can be found in the accompanying local authority reports.

8 2 City The Stirling and Clackmannanshire Region Deal

9 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 9 Stirling and Clackmannanshire City Region Deal 1 is made up of two local authority areas: Clackmannanshire and Stirling. This section outlines key characteristics of the city deal region focusing on it s economy and its people. Stirling and Clackmannanshire s Economy and Place GVA and Productivity In relation to the Scottish economy, the city deal region is mostly characterised by low output and low productivity (based on GVA per head, although productivity is slightly higher in Clackmannanshire) (Figure 2.1). The region is a mixed urban and rural economy and based on 2015 data, the city deal region contributed 2,667 million in GVA 2 ; around two per cent of total output for Scotland. At 12 per cent of the city deal regional output (2015 figures), the Wholesale and retail trade sector accounted for the highest sectoral output in the region. This was followed by Manufacturing (11 per cent) and then, Real estate activities and Human health and social activities (both 10 per cent). The city deal region s productivity (measured as GVA per job, 2015) was 43,260, below the Scottish average of 45, Hereafter referred to in text as the city deal region. 2 GVA is the measure of the value of goods and services produced. There was, however, variation across the city deal region: Stirling made the greatest contribution to national accounts in the city deal region, accounting for two per cent of Scotland s GVA output. Clackmannanshire accounted for one per cent; and Clackmannanshire ( 44,124) had the highest productivity in the city deal region, and the sixteenth highest productivity in Scotland. Productivity (measured in GVA per head) was particularly low in Stirling at 36,820, this was the fourth lowest of any Scottish local authority area. GVA growth in the city deal region is forecast 3 to average 1.6 per cent between 2017 and This is slightly slower than growth for Scotland (1.7 per cent), and much slower than the forecast for the UK (two per cent). The pace of growth is expected to slow in the short term as the consumer sector loses momentum in the face of rising inflation, businesses invest cautiously due to Brexit-related uncertainty, and fiscal policy remains tight. Compared to Scotland, the fast-growing Private services 4 account for a lower share of the economic output in the city deal region, with the slower growing manufacturing and the public-sector industries accounting for a larger share. The city deal region s most dynamic sectors are expected to be Professional, scientific, and technical activities with GVA growth of 3.4 per cent per annum up to 2027, along with Administration and support services and Information and communications which will grow by three per cent or more. However, it is the city deal region s relatively large Wholesale and retail trade sector that is expected to make the largest contribution to growth, accounting for 14 per cent of overall increase in output. 3 Forecasts by Oxford Economics. 4 Private services consists of: Wholesale and retail trade, Transportation and storage; Accommodation and food services; Information and communication; Financial and insurance activities; Real estate activities; Professional, scientific and technical activities; Administrative and support services; Arts, entertainment and recreation and Other service activities.

10 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 10 Figure 2.1 Distribution of GVA ( million, constant 2013 prices) and Productivity (per job) by City Deal Region, 2015 Source: Oxford Economics Productivity Aberdeen City Region Deal Low GVA, High Productivity High GVA, High Productivity 1 Edinburgh and South East Scotland City Region Deal 0 Output (GVA) Glasgow City Deal Low GVA, Low Productivity High GVA, Low Productivity Stirling and Clackmannanshire City Region Deal Inverness and Highlands City Region Deal Note: the data is scaled - the units used are standard deviations from the mean.

11 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 11 Figure 2.2 Distribution of GVA ( million, constant 2013 prices) and Productivity (per job) by Local Authority, 2015 Source: Oxford Economics Productivity Aberdeen City 2 Aberdeenshire Low GVA, High Productivity Moray Edinburgh City High GVA, High Productivity East Renfrewshire 1 Inverclyde South Ayrshire West Dunbartonshire East Dunbartonshire Renfrewshire Perth and Kinross Angus Fife Glasgow City Clackmannanshire South Lanarkshire North Lanarkshire East Lothian North Ayrshire Output (GVA) Low GVA, Low Productivity Falkirk West Lothian Highland Midlothian Dundee City Dumfries and Galloway Eilean Siar East Ayrshire 1 Scottish Borders Shetland Islands Stirling Argyll and Bute High GVA, Low Productivity Orkney Islands Note: the data is scaled - the units used are standard deviations from the mean.

12 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 12 The Business Base There is a total of 5,045 businesses operating within the City Deal region, over three-quarters of which (77 per cent) are based in the city of Stirling local authority area. The largest sector (in terms of the business base) within the city deal region is Professional, scientific, and technical, accounting for 18 per cent of all businesses this is also the largest sector within the two local authority areas. Construction is the second largest sector at the city deal regional level (11 per cent of all businesses) and, again, this is also true for both local authority areas (albeit to differing degrees, 13 per cent in Clackmannanshire and ten per cent in Stirling). Whilst broadly in keeping with the regional and national sectoral breakdowns, there are some differences between the two local authority areas worth noting. These include: A greater share of businesses operating within the Agriculture, forestry and fishing, and Financial and insurance sectors within Stirling; and A greater share of businesses operating within the Production, and Construction sectors within Clackmannanshire. Table 2.1 Sectoral Breakdown of Business Base, (2016) Source: UK Business Counts 2016 City Region Deal Clackmannanshire Stirling Scotland Agriculture, forestry & fishing 9% 4% 10% 10% Production 5% 8% 4% 6% Construction 11% 13% 10% 11% Motor trades 2% 2% 2% 3% Wholesale 4% 4% 3% 3% Retail 8% 9% 7% 8% Transport & storage 3% 4% 2% 3% Accommodation & food services 9% 10% 9% 8% Information & communication 6% 5% 6% 6% Financial & insurance 2% <1% 3% 2% Property 4% 3% 4% 3% Professional, scientific & technical 18% 17% 19% 19% Business admin & support 7% 8% 7% 7% Public admin. & defence 5 <1% <1% <1% <1% Education 2% 1% 2% 1% Health 3% 3% 4% 4% Arts, entertainment, recreation, other 7% 8% 7% 7% Total 5,045 1,140 3, ,905 5 Please note from ONS: All figures are rounded to avoid disclosure. Values may be rounded down to zero and so all zeros are not necessarily true zeros. Totals across tables may differ by minor amounts due to the disclosure methods used. Furthermore, figures may differ by small amounts from those published in ONS outputs due to the application of a different rounding methodology.

13 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 13 The business density of the city deal region (number of businesses per 10,000 population) is 285. There are differences between the two local authority areas within the region, with business density ranging from 222 in Clackmannanshire (ranked 28th out of the 32 Scottish local authorities) to 415 in Stirling (ranked ninth of 32). In terms of business size (2016), the composition at the city deal regional level is almost identical to Scotland in that micro businesses (employing zero to nine people) make up the majority of businesses within the region (88 per cent). This is also the same for both local authority areas within the city deal region, as set out in Table 2.2. Table 2.2 Proportions of businesses by size band, 2016 Source: UK Business Counts. N.B. Totals may not sum due to rounding. Clackmannanshire Stirling City Region Deal Scotland % 88% 88% 88% % 10% 10% 10% % 1% 1% 2% % <1% <1% <1% The number of business births within a region can indicate dynamism in that region s economy. By business births per 10,000 of the population, the city deal region ranks last out of the five city deal regions with 39 business births per 10,000 population. There are, however, different rates within the city deal region, with Stirling having a business birth rate of 43 per 10,000 population (ranked fifth of 32 Scottish local authority areas), and Clackmannanshire having a rate of 32 (ranked 24th). Looking at births, deaths and survival rates together over time enables us to see the broader picture.

14 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 14 Figure 2.3 Business births and deaths per 10,000 population ( ) and Business survival index ( ) Source: ONS Business Demography and Mid-Year Population Estimates per 10,000 population Business Births per 10,000 population Business Deaths per 10,000 population Business Survival Rates, Index 2010= 100 Recession (2008-9) Whilst there was an immediate and severe impact of the recession on the business birth rate between 2008 and 2009, there has been relatively strong recovery since (despite a decrease in the most recent year). Despite fluctuations, the business birth rate remains broadly similar over the period, decreasing marginally from 40 in 2005 to 39 in The business death rate has, however, increased over the period from 30 in 2005 to 32 in Despite decreasing in the initial part of the decade, the business death rate increased during and immediately after the recession, and despite a sharp dip, has increased again in recent years. If we look at the business survival rate, using 2010 as the baseline year, the business survival rate falls year on year, although less sharply as businesses mature and survive the difficult early years trading. Note: for Business Survival Rates only available for in Evidence Base.

15 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 15 Business Expenditure on Research and Development (BERD) Business Expenditure on Research and Development (BERD) in the Stirling and Clackmannanshire City Deal Region area varies across the two local authorities and against the national average. Businesses in Stirling invest the most in the City Deal, possibly due to the university presence; Clackmannanshire in contrast is very low. This is particularly surprising given the region s specialisation in Manufacturing where research and development can encourage innovation and improved processes/products. Earnings There are also variations in earnings within the Stirling and Clackmannanshire City Region Deal area e.g. workplace earnings range from 444 in the Clackmannanshire local authority area to 404 in Stirling. For workplace based earnings, Clackmannanshire was in excess of the Scottish average by 12, whilst in Stirling, workplace earnings were 28 below the national average. However, for resident based earnings, Stirling was 32 above the national average whereas Clackmannanshire was 1 below. Further information is provided in Table 2.3 Table 2.3 Resident and workplace based earnings, 2016 (Median) Source: Annual Survey of Hours and Earnings, 2016 Provisional Figures. Figures based on weekly pay of all workers. Area Resident Earnings Workplace Earnings Clackmannanshire Stirling Scottish Average The difference between where a person lives (resident earnings) and where they work (workplace earnings) can tell us whether: Individuals are more likely to travel to other local authority area to work and, therefore, Whether their skills are retained within that local authority area or leak outside. Commuting flows can also help us understand this. Difference between resident and workplace earnings

16 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 16 Commuting There is a reasonably high proportion of people commuting outwith the city deal region particularly true of Clackmannanshire. If we look at 2011 Census data, this is confirmed: Over half of those from the Clackmannanshire local authority area (56 per cent) commute out, with Stirling (29 per cent of all commuters) the most common destination; and For the Stirling local authority area, just under two-fifths (38 per cent) commute out of the area. Glasgow City and Falkirk are the most common destinations (nine per cent and eight per cent of all commuters, respectively). A further four per cent commute to Clackmannanshire. Table 2.4 Stirling and Clackmannanshire City Region Deals local authorities out commuting proportions by occupational grouping (SOC 7 ) Source: Origin Destination statistics by Local Authority, open access (WB07BUK_la), UK Data Service. Note: denominator = total trips out of the local authority. SOC 1-3 SOC 4-6 SOC 7-9 Clackmannanshire 42% 29% 29% Stirling 65% 19% 16% The largest occupational groupings commuting out of both local authority areas are those in higher skilled occupations (SOC 1-3) 6, suggesting that those with higher skill levels may travel more to access suitable employment opportunities. 6 Managers, Directors and Senior Officials (SOC 1), Professional Occupations (SOC 2) and Associate Professional and Technical Occupations (SOC 3) 7 A link to the Standard Occupational Classification is here: ard-occupational-classification/ons_soc_hierarchy_view. html

17 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 17 Deprivation The city deal region has a low share (two per cent) of the most deprived deciles in Scotland 8. Between the local authorities there are differences however, with Stirling having fewer areas of deprivation (five per cent of the local authority area s data zones) 9 than Clackmannanshire (eleven per cent). Within the local authority areas, there are differences too. Both Clackmannanshire and Stirling have areas of high deprivation along the River Forth, particularly in central Stirling and Alloa as well as other areas of Clackmannanshire like Tullibody, Tillicoultry and Alva. Outside of Stirling city centre, areas of least deprivation are typically concentrated in Dunblane, Bridge of Allan to the north of Stirling and more rural areas like Blane Valley and Balfron and Drymen. In Clackmannanshire, the areas of least deprivation are also outwith the main centres, to the north-west and north-east of the local authority area in areas like Dollar and Menstrie. That said, SIMD identifies deprived areas - not people. Guidance on the use of SIMD by Scottish Government highlights that: Not all deprived people live in deprived areas: Two out of three people who are income deprived do not live in deprived areas; and Not everyone in a deprived area is deprived: Just under one in three people living in a deprived area are income deprived 10. This is important when analysing deprivation, particularly in rural areas. 8 Most deprived here defined as Scotland s 10% Most Deprived Data Zones. 9 As a proportion of all datazones in the local authority. 10

18 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 18 Figure 2.4 Deprivation in Stirling and Clackmannanshire City Region Deal by SIMD (2016) 11 Deciles 1-10 Source: Scottish Government and Ordnance Survey, 2016 Stirling and Clackmannanshire City Region Deal (SIMD 2016) Deciles 1-2 (Most Deprived) Deciles 3-4 Deciles 5-6 Deciles 7-8 Deciles 9-10 Stirling Clackmannanshire Data contains Scottish Government data Crown copyright Base: Ordnance Survey Crown copyright 2016 & database right See SIMD interactive map here: simd2016/btttftt/11/ / /

19 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 19 Stirling and Clackmannanshire s People In introducing the city deal region s people we outline information on demography, labour market participation, qualifications and attainment. Demography The total population of the city deal region in 2016 was 145,100 people, around two-thirds of which (65 per cent, c. 94,000 people) live in the city of Stirling local authority area with the remainder in Clackmannanshire. Almost two-thirds of the city deal regional population (64 per cent) are of a working age (aged 16 64), with 19 per cent aged 65 or older and 17 per cent younger than 16. This trend of the majority of people being of working age is evident across both of the local authority areas within the region, ranging from 63 per cent in Clackmannanshire to 65 per cent in the city of Stirling. Each of the local authority areas has a slightly higher share of people aged 65 or older than those aged under per cent compared to18 per cent in Clackmannanshire and 19 per cent compared to 17 per cent of Stirling. Based on 2014 population projection data, it is estimated that the city deal region population by 2039 will be 150,976; an increase of 7,934 (or six per cent). This is equal to the predicted national rate of growth over the same period. Population projections for the local authority areas by 2039 are: Clackmannanshire - a population of 49,633, a decrease of three per cent from 2014; and Stirling a population of 101,343, an increase of 10 per cent from At the city deal region level, significant increases are predicted among those aged 65 or older; these are the only age groups forecast to increase by These age groups are also forecast to increase in both local authority areas, whilst the number of under-16s is also forecast to increase in Stirling (Table 2.5). Table 2.5 Population projections, % change by age band, Source: National Records of Scotland. At the city deal region level, the working age population is forecast to decrease by seven per cent (slightly higher than the national rate of five per cent). Again, this is forecast to have a different impact at the local authority levels the working age population of Stirling is forecast to decrease by one per cent, whilst in Clackmannanshire the decrease will be 19 per cent Total City Region Deal -1% -9% -4% -10% 27% 97% 6% Clackmannanshire -10% -14% -20% -21% 23% 112% -3% Stirling 4% -6% 6% -3% 30% 90% 11% Scotland 1% -8% -2% -6% 27% 85% 7%

20 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 20 Labour Market Participation The overall employment rate in the city deal region (71 per cent) was below the national average in 2016 (73 per cent). The employment rate was in line with the national average in Stirling (73 per cent), however, in Clackmannanshire the employment rate was below the national average at 71 per cent. As Figure 2.5 shows, each local authority area in the city deal region had a different pattern of labour market participation; Stirling had low unemployment and high inactivity and Clackmannanshire had high unemployment and high inactivity. People can be economically inactive for a number of reasons, for instance they might be a student, looking after their family and home, long term or temporarily sick, discouraged or retired (before aged 65). In the city deal region, the economic inactivity rate was highest (26 per cent) in Clackmannanshire. The economic inactivity rate in Stirling was also above the national average (24 per cent) which due to the presence of a number of universities and college campuses might be expected a number of those inactive will be students. As of 2016, 3,700 working age people were unemployed in the city deal region, accounting for three per cent of the national total (128,400) 12. Those unemployed in the city deal region were split almost equally between the two local authorities - 51 per cent in Clackmannanshire and 49 per cent in Stirling. The ILO unemployment rate in the city deal region was five per cent, in line with the national average. The economic inactivity rate for the city deal region was 25 per cent in 2016, slightly higher than the national rate (23 per cent) Source: ILO Unemployment rate. 13 Source: Annual Population Survey, Economic inactivity rate.

21 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 21 Figure 2.5 Unemployment (ILO) and Economic Inactivity by RSA City Deal Region, January to December 2016 Source: Annual Population Survey (resident based) Economic Inactivity Rate by City Region Stirling and Clackmannanshire City Region Deal 1.0 Low Unemployment, High Inactivity Edinburgh and South East Scotland City Region Deal Glasgow City Deal High Unemployment, High Inactivity Unemployment (ILO) Rate by City Region Aberdeen City Region Deal Low Unemployment, Low Inactivity 1.0 High Unemployment, Low Inactivity Inverness and Highlands City Region Deal Note: the data is scaled - the units used are standard deviations from the mean.

22 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 22 Figure 2.6 Unemployment (ILO) and Economic Inactivity by Local Authority, January to December 2016 Source: Annual Population Survey (resident based) Economic inactivity rate, working age population Glasgow City Dundee City East Ayrshire North Ayrshire Low Unemployment, High Inactivity 1 Edinburgh City South Ayrshire Inverclyde West Dunbartonshire Fife Stirling East Lothian Aberdeen City Clackmannanshire High Unemployment, High Inactivity North Lanarkshire East Dunbartonshire West Lothian Dumfries and Galloway Midlothian Renfrewshire South Lanarkshire East Renfrewshire Moray Perth and Kinross Falkirk Argyll and Bute Angus Highland Scottish Borders Working Age Population (ILO) Eilean Siar 1 Aberdeenshire 2 Low Unemployment, Low Inactivity High Unemployment, Low Inactivity Shetland Islands Note: the data is scaled - the units used are standard deviations from the mean. ILO Unemployment estimate for Orkney Islands is not available since the group sample size is zero or disclosive (0-2) and thus omitted.

23 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 23 Working Age Qualifications (16-64) 14 The city deal region had slightly lower levels of advanced qualifications (SCQF levels 7 12) compared to the national average (43 per cent compared to 44 per cent in 2016). However, the level of intermediate qualifications (SCQF levels 5 and 6) in the city deal region was above the national average 31 per cent compared to 28 per cent. There were fewer people within the city deal region with no qualifications than the national average eight per cent compared to ten per cent. Within the city deal region the qualification profile of the local authorities varied. Stirling (46 per cent), had a higher proportion of residents with higher level qualifications (SCQF levels 7-12) than the national average, whereas Clackmannanshire had a below average proportion (23 per cent). Both Clackmannanshire and Stirling had a higher proportion (31 per cent) of the population with intermediate qualifications (SCQF levels 5-6) than the national average. Clackmannanshire had a greater proportion (21 per cent) of people with no or low (SCQF levels 1-4) qualifications compared to the national average (19 per cent). Stirling had a proportion of 14 per cent, below the national average. 14 Please note this does not include Trade Apprenticeships School Leavers Destinations In 2015/16, 36 per cent of school leavers in the city deal region went into higher education; this was just below the Scottish average (37 per cent). Within the city deal region, the two local authority areas had wide differences; from 42 per cent in Stirling (above the national average) to 22 per cent in Clackmannanshire (the lowest in Scotland). The proportion of school leavers going into higher education has increased in Stirling, by three per cent since 2009/10, but not in Clackmannanshire, where it fell by six per cent. The proportion of school leavers going into further education has decreased since 2009/10, with one percentage point fewer leavers in the city deal region taking this option with the decline occurring in both local authority areas. Overall less than one-fifth (17 per cent) of school leavers in the city deal region went into further education as their initial leaver destination. This was below the national average (22 per cent). By local authority area the proportions varied, from 22 per cent in Clackmannanshire, to 17 per cent in Stirling. Employment as an initial leaver destination has increased in the city deal region and Scotland as a whole since 2009/10. Within the city deal region, over one third (35 per cent) of school leavers entered employment after school 2015/16. Within the city deal region the proportions again varied by local authority; 39 per cent in Clackmannanshire and 33 per cent in Stirling. The proportion of school leavers becoming unemployed in the city deal region (seven per cent) was below the national average (eight per cent); this rate represented a decrease of seven percentage points on 2009/10. Over the period 2009/10 and 2015/16, overall within the city deal region there has been an increase in the proportion of school leavers entering higher education or employment. Decreases have occurred in the proportion of young people entering further education or unemployment.

24 Regional Insight Report 2 The Stirling and Clackmannanshire City Region Deal 24 Table 2.6 School Leaver Destinations, 2009/10 and 2015/16 Source: Scottish Government School Leavers Destination Dataset Destination City Region Deal Clackmannanshire Stirling Higher education (%) 2009/10 35% 28% 39% 2015/16 36% 22% 42% Change 1% -6% 3% Further education (%) 2009/10 19% 23% 17% 2015/16 17% 22% 16% Change -1% -2% -1% Employment (%) 2009/10 25% 24% 26% 2015/16 35% 39% 33% Change 10% 14% 7% Unemployment (%) * 2009/10 14% 16% 13% 2015/16 7% 10% 6% Change -7% -6% -8% * Unemployment Seeking and Unemployment Not Seeking The economic downturn may have affected the destinations of school leavers in 2009/10, with young people becoming unemployed due to labour market contraction at the time, or entering further or higher education due to a lack of opportunities in the labour market. Economic recovery accounts for much of the increase in the proportion of young people entering employment after school, and perhaps the reductions in other post school destinations. In terms of the 2017 Annual Participation Rate (16-19 year olds) 15, within the city deal region Stirling had the highest rate (94.3 per cent) and was in excess of the Scotland average (91.1 per cent). Clackmannanshire (89.7 per cent) had a participation rate below the national average Annual Participation Measure, % of year olds participation 1st April 2016 to 31st March As agreed by Scottish Ministers, from August 2017, the Annual Partic ipation Measure will be adopted within the Scottish Gov ernment s National Performance Framework. It is replacing the school leaver destination follow up as the source of the indicator, increase the proportion of young people in learn ing, training or work, published through Scotland Performs. See below for details: dia/43580/2017_annual-participation-measure-report -29th-august-2017.pdf

25 3 City Demand for Skills in Stirling and Clackmannanshire Region Deal

26 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 26 Demand 16 for Skills in Stirling and Clackmannanshire City Region Deal This section outlines past, current and forecast trends for total employment and sectors, occupations and qualifications. These forecasts have been developed by Oxford Economics 17 and, like any forecasts, they are based on what we know now; past and present trends projected into the future. They can therefore be affected by potential disruptors (e.g. Brexit) and unforeseen events and their value is in identifying likely directions of travel rather than predicting exact figures. Finally, the more disaggregated they become, especially at smaller geographical units, the less reliable they are likely to be. Total Employment As shown in Figure 3.1, total employment (jobs) within the city deal region currently ( ) sits at 71,000, representing regional employment growth of some 16 per cent since 2000 (compared to 10 per cent nationally). The effect of the recession on employment is clear, declining from 71,200 in 2007 to 63,200 in 2011 (11 per cent), the lowest figure since There has, however, been annual growth since 2011, and continued moderate growth is forecast until 2027; employment is forecast to increase by three per cent between 2017 and 2027, in line with the national average. 16 Note: the analysis here is workplace based. Note the forecast period for skills demand is defined as follows: Total employment: 2017 and 2027; Total requirement: 2017 and 2027 (inclusive). For more information on Oxford Economics definitions please see Appendix For more information of the methodology used in the Oxford Economic forecasts, please see the Regional Skills Assessments section of the Skills Development Scotland website: partnerships/regional-skills-assessments/ 18 Note 2017 is itself a forecast

27 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 27 Figure 3.1 Total Employment Projections (jobs), Source: Oxford Economics. '000s Total employment (jobs) As Stirling contains just over three quarters (76 per cent) of city deal regional employment, it is the main driver of employment change in the area, and therefore reflects the regional trend. Clackmannanshire experienced a decline in jobs in the early 2000s, before sharp growth from 2005 onwards. Like Stirling, employment in Clackmannanshire is now above it s pre-recession level. Employment in Stirling is forecast to increase by four per cent to 2027, in line with the city deal region increase as a whole. Clackmannanshire employment is, however, expected to remain relatively flat over the forecast period, with a very slight increase of 0.4 per cent.

28 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 28 Moving on to employment by gender and status (fulltime/part-time), Figure 3.2 illustrates the change in employment over time. The number of male full-time jobs peaked in 2007 with 30,700 jobs, followed by a post-recession decline and gradual recovery. Between 2017 and 2027, the number of male full-time jobs is projected to remain static, in contrast to female full-time jobs which are projected to rise by six per cent (having decreased in the 2000s). Part-time work is projected to rise for both females and males (by four per cent and two per cent, respectively), confirming a continuing trend in nonstandard work which is being seen nationally. Figure 3.2 Total Employment (jobs) projections, by status and gender Source: Oxford Economics. '000s Male full -time Male part-time Female full-time Female part-time

29 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 29 Occupations In this section, we look at two measures of forecast demand: Total Employment: the numbers within each occupational grouping. The total numbers employed in 2017 and then in 2027 are contrasted. Total Requirement: instead of overall numbers employed, we look at the numbers of positions that are actually forecast to open up, mainly due to people retiring but also net migration and movement into other occupations (replacement demand) as well as those that open up due to new, additional positions being created (expansion demand). Total Requirement is summed across the years (inclusive). At any one time, Total Employment will be higher than Total Requirement; that is, the total numbers in the occupational structure will be higher than the positions that open up within that structure.

30 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 30 Occupational Structure Total Employment Past and Present Moving on to occupations, as Figure 3.3 illustrates, the occupational structure of the workforce across the city deal region has changed during the period 2000 to Figure 3.3 Stirling and Clackmannanshire City Region Deal Occupational Structure, 2000 and 2017(people, 000s) Source: Oxford Economics Professional occupations have increased by 41 per cent to become the largest occupational group with around 13,100 people employed in these roles. There has also been substantial growth in Caring, leisure and other services (63 per cent), which is now the fourth largest grouping (it was the second smallest in 2000). There have been decreases in three occupational groupings - Administrative and secretarial roles (31 per cent), Elementary occupations (30 per cent), and Sales and customer service (16 per cent). '000s All but two occupational roles are forecast to increase between 2017 and 2027 the largest increase is forecast for Professional occupations (400 people), with Elementary occupations increasing by 300 people and Caring, leisure and service occupations and Skilled trades both forecast to grow by 200 each. Both Process, plant and machine operatives and Administrative and secretarial occupations are forecast to decrease, by 100 people each. 0 Managers, directors & senior officials Professional occ. Professional & tech. occ. Admin. & secretarial occ. Skilled trades Caring, leisure & other service Sales & customer service Process, plant & machine operatives Elementary occ. Total

31 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 31 Occupational Structure: Forecast Total Employment In terms of employment, the largest occupational grouping across the city deal region is Professional occupations, with 13,500 people forecast in 2027 (Figure 3.4). The next largest groupings are Skilled trades, with 7,600 jobs forecast in 2027, and Professional and technical occupations (7,500 jobs). Figure 3.4 Total employment (people, 000s) by occupation, 2017 and 2027 Source: Oxford Economics. Note: Data labels for 2027 only. Managers, directors & senior officials Professional occ Professional & tech. occ. 7.5 Admin. & secretarial occ. 4.5 Skilled trades Caring, leisure & other service Sales & customer service 4.3 Process, plant & machine operatives 4.7 Elementary occ. 6.4

32 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 32 Table 3.1 Proportion of occupations at higher, middle and lower levels of labour market, 2027 Source: Oxford Economics Forecast data. N.B. These groupings are categorised as follows: Higher level SOC codes 1 to 3; Middle level SOC codes 4 to 6; and Lower level SOC codes 7 to 9. City Region Deal Clackmannanshire Stirling Higher level jobs 44% 44% 44% Middle level jobs 31% 33% 30% Lower level jobs 25% 23% 26% As shown in Table 3.1, by 2027, 44 per cent of occupations in both Clackmannanshire and Stirling (and so to the city deal region) will be higher skilled jobs. These figures remain largely unchanged on 2017 figures. Overall then, the occupational structure in all three comparator areas can be described as an inverted triangle, with the largest proportion of jobs requiring higher skills levels, and the lowest requiring lower levels of skills.

33 Regional Insight Report 3 Demand for Skills in Stirling and Clackmannanshire City Region Deal 33 Occupational Structure: Forecast Total Requirement In terms of total requirement (people), 21,000 people in total are forecast to be required over the period (Table 3.2). This is largely driven by replacement demand with 19,600 people required (93 per cent of the total requirement) rather than expansion demand, with 1,400 jobs. Table 3.2 Expansion demand, replacement demand and total requirement (people, 000s), Stirling and Clackmannanshire City Region Deal, Source: Oxford Economics Forecast data. Occupation Expansion Demand Replacement Demand Managers, directors & senior officials Professional occupations Associate professional & technical occupations Administrative & secretarial occupations Skilled trades occupations Caring, leisure & other service occupations Sales & customer service occupations Process, plant & machine operatives Elementary occupations Total Total Requirement Professional occupations are forecast to have the highest levels of total requirement (6,100 people), driven by Stirling (5,100 people). This is followed by Elementary occupations (4,800 people), again driven by Stirling (3,700 people). At the two digit SOC level, the Professional occupations have the highest requirement in Teaching and Research Professionals (2,200 people) and Business and Public Service Professionals (1,900 people). This is driven by Stirling, with 1,800 people required in Teaching and Research and 1,600 in Business and Public Services. At this detailed occupational level, there is also a relatively large requirement for Science and Technology Professionals in Stirling (1,400 people). Within Elementary occupations, this is driven by Clerical and services (4,000 people) at the two digit SOC level. Most of the requirement comes from Stirling (3,100 people). Finally, at this disaggregated level there is also a relatively high requirement for Sales occupations (2,500 people), Textiles printing and other trades, and Administrative occupations (both 1,100 people).